Alert July 16, 2013

FinCEN Grants Exception to CTR Filing Requirements in Connection with Certain Armored Car Service Transactions

The Financial Crimes Enforcement Network (“FinCEN”) issued an administrative ruling on July 12, 2013, granting an exception (the “Exception”) from reporting and data collection requirements in certain circumstances when a financial institution uses armored car services on behalf of its customers.  The Exception was issued in response to concerns about the reporting requirements under FinCEN ruling FIN-2009-R002.  FIN-2009-R002 provided that financial institutions are subject to the same Currency Transaction Report (“CTR”) filing requirements for transactions involving the use of armored car services on behalf of a customer as they are for transactions involving any other third-party service provider.  Financial institutions maintained that complying with FIN-2009-R002 is logistically challenging, because of the difficulties in differentiating transactions conducted by an armored car service on behalf of a customer from those performed on behalf of the financial institution and in identifying which transactions with an armored car service are covered within the 15-day CTR filing deadline.  In addition, financial institutions noted that, because of security concerns, it is often difficult to collect the required personal information from the armored car service employees to be included in the CTR.

In an attempt to respond to these practical concerns, while still preserving the interests of law enforcement, FinCEN granted the Exception regarding the completion of CTRs for certain armored car service transactions.  The Exception only applies if the armored car service employees conduct transactions that debit or credit the account of a financial institution’s customer pursuant to instructions from the customer or a third party.  FinCEN stressed that the Exception does not affect the obligations of financial institutions covered under the Bank Secrecy Act (“BSA”) from filing suspicious activity reports in regards to any transaction that the financial institution knows or suspects is intended to circumvent a requirement under the BSA or any other federal reporting requirement, or which has no lawful or apparent business purpose.  Financial institutions prepared to submit CTRs in accordance with this ruling may take advantage of the Exception immediately, whereas those financial institutions that are still modifying their systems to comply with the CTR filing requirements may avail themselves of the Exception and delay compliance to a date no later than September 30, 2013.